Features of monetary policy at low rates

Особенности денежно-кредитной политики в условиях низких ставок

Nesterova, Kristina (Нестерова, Кристина) (nesterovakv@ranepa.ru)
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Nesterova, Kristina (Нестерова, Кристина): The Russian Presidential Academy of National Economy and Public Administration

Working Papers from Russian Presidential Academy of National Economy and Public Administration

Abstract: The paper analyses a number of monetary rules helping to decrease the probability of the nominal interest rate hitting the zero lower bound. Such measures include integral stabilization, NGDP targeting, price level targeting, raising the inflation target, introducing negative nominal interest rates etc. Discretion such as sharp preventive drop in the interest rate and LSAP to “lower for longer” are also considered. According to up-to-date New-Keynesian general equilibrium models, the major advantage of rules such as NGDP and price level targeting is their capacity to prevent zero lower bound episodes mainly by managing expectations of the public efficiently, which is a drawback of discretionary policy.

Keywords: monetary policy; zero lower bound; inflation targeting; price level targeting; NGDP targeting. (search for similar items in EconPapers)
Pages: 27 pages
Date: 2020-03
New Economics Papers: this item is included in nep-dge, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:rnp:wpaper:032044

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